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Pet Industry Spending Surpasses $50 Billion on Services Growth

Posted: March 1, 2012, 3:50 p.m. EST


Pet Industry Spending Surpasses $50 Billion on Services Growth
The pet services category led an overall growth trend in the pet industry in 2011, as total spending surpassed $50 billion, but 2012 growth is expected to flatten, according to the American Pet Products Assn.’s annual comprehensive spending and data report.

Spending in the pet industry grew by 5.3 percent in 2011 compared to 2010 and is expected to grow by 3.8 percent to $53 billion in 2012, according to the report.

The pet services segment, including grooming, boarding, pet hotels, pet sitting, day care and other services, was the fastest-growing category, expanding by 7.9 percent from 2010 to 2011. The APPA expects pet services to lead growth in 2012 as well, with a projected growth rate of 8.4 percent.

"As the total pet population continues to grow, despite a slower pace, we still see the overall industry expanding year after year,” said APPA president Bob Vetere. "As pet owners continue to pamper pets and treat them like members of the family, we see positive growth and a response to consumer demand for more products and services which we expect to see through 2012.”

Pet Industry Spending and Estimates by Category

 Category 2010 Actual
($ billions)
2011 Actual
($ billions)
% Growth, 2010-2011 2012 Estimate
($ billions)
% Estimated Growth, 2011-2012
Food 18.76 19.85 5.8 20.46 3.1
Supplies/OTC Med 10.94 11.77 7.6 12.56 6.7
Veterinary Care 13.01 13.41 2.9 13.59 1.3
Live Animal Purchases 2.13 2.14 0.4 2.15 0.5
Other Services 3.51 3.79 7.9 4.11 8.4
Total 48.35 50.96 5.3 52.87 3.8

The pet supplies and OTC medications segment nearly kept pace with the services category, growing by 7.6 percent in 2011 versus the previous year and representing the second largest source of consumer spending behind the food category. Increased use of OTC medications as an alternative to veterinary care drove spending in the supplies and OTC medication category, and the pattern is expected to continue in 2012 with the anticipated growth of 6.7 percent, according to the APPA.

The food category grew by 5.8 percent from 2010 to 2011, but it is estimated to rise by only 3.1 percent in 2012. Vetere attributes two factors to the lower projected growth in 2012. First, pet sales and adoptions are flattening, according to the APPA’s National Pet Owners Survey and others, meaning the total money spent is spread over virtually the same number of animals. Second, most of the polarization to high-end foods has already taken place, so the food segment is reverting back to a more traditional growth model.

Spending in the veterinary care category grew by 2.9 percent from 2010 to 2011, but it is anticipated to grow by just 1.3 percent in 2012. Spending on pet insurance, included in the veterinary care category, grew by 9.2 percent to $450 million from 2010 to 2011, and it is expected to increase to $500 million in 2012.

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